What comes after the Federal Reserve cut?

Yesterday, US Federal Reserve lowered interest rates by a quarter of a percentage point to a range of 3.5 to 3.7%. The cut is the second of the year and was preceded by a September 17^th rate cut. While many businesses might cheer the announcement, the picture is slightly more complicated for insurers.

Life insurers will be most affected as they are heavily invested in bonds to match their long-term liabilities. These fixed-income assets provide predictable returns, but when rates fall, insurers face more challenging times.

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